Vice President, Prof. Yemi Osinbajo yesterday expressed concern over the high mortality rate of small and medium scale enterprises (SMEs) in the country.
The vice president lamented the rate at which small businesses were shutting down due mainly to tax -related issues, among others.
Osinbajo, who spoke at the maiden Abuja SME Conference and Exhibition, with the theme: “Solution Strategies for Resolving Tax, Regulatory, Packaging and Logistic Challenges Facing Nigerian SMEs,” which was organised by the Abuja Chamber of Commerce and Industry (ACCI), said, “the problem of taxation on the growth of SMEs is exacerbated by a lack of reliable data for statistical analyses.”
He, however, assured that the current administration remains committed to improving the ease of doing business as well as encourage tax and fiscal responsibility in the country.
He said the Presidential Enabling Business Environment Council (PEBEC) had been doing a lot to address the thorny issue of multiple taxation which has a debilitating effect on the business environment.
Represented at the occasion by the Minister of State for Industry, Trade and Investment, Mrs. Mariam Katagum, the vice president specifically pointed out that SMEs were facing challenges of multiple taxation at the national and sub-national levels, non-clarity on the procedure and amount to pay and non-friendly tax administrators.
However, he further said the federal government, aware of the constraints affecting the business landscape had over the last two years, through the Finance Act 2019 and 2020, amended various tax and fiscal legislations to align the Nigerian business environment with global standards.
He identified one of such amendments to be the categorisation of companies into small, medium, and large companies, based on annual gross turnover as seen in the Finance Act 2019, adding that the Act also has a strategic objectives to support small businesses in line with the ease of doing business reforms.
Osinbajo said in order for SMEs to sustain their role of contributing to the mainstream economy, they have to implement effective strategies in all of their business operations, inclusive of logistics.
He said the function of logistics was important to SMEs because it is the quintessence of the organisation’s relationship with suppliers and customers.
He said though logistics, including high transportation costs, lack of quality delivery service and lack of quality infrastructure such as roads constituted major challenges, the President Muhammadu Buhari-led administration had made massive investments in the railways, power and roads infrastructure all over the country trying to addressing the issues.
He further described the theme of the conference as appropriate and timely, especially with the advent of the African Continental Free Trade Area Agreement (AfCFTA).
He said, “This is so because there are several African countries that have the scale to compete with Nigerian businesses in terms of productive capacity, packaging, exports and logistics.
“Consequently, Nigerian businesses would have to adapt to the new form of competition, on the back of the trade environment, created by the AfCFTA.
“Additionally, Nigerian businesses must learn to position themselves to take advantage of the new markets that have been opened to them- a single market of 1.2 billion people and a cumulative GDP of over $3.4 trillion.”
Describing SMEs as powerful tools for growing emerging economies such as Nigeria, the vice president, tasked stakeholders at the gathering to ponder on the challenges confronting the sector and come up with other practicable approaches that will see SMEs to excel.
In his remarks, President of ACCI, Dr. Al-Mujtaba Abubakar, said the conference was convened to provide answers to the often repeated challenges facing SMEs in the country.
He pointed out that there are no shortage of analysis and reviews on problems facing SMEs, adding that, “What is missing is the creation and implementation of solutions by stakeholders.”
“Our goal for this conference is to match problems with solutions alongside developing an implementation plan,” he added.
Abubakar said the chamber remained one of the foremost advocates for businesses in Nigeria, particularly in the SME space.
According to him, multiple taxation had been identified as the principal headache killing SMEs and in effect, deepening unemployment in the country.
He explained: “We had proposed a legislation to harmonise taxation for SMEs. Our detailed submission also seeks a presidential executive order collating all current incentives for SMEs and issuing directive for due compliance.
“I want to re-emphasis and strongly recommend that tax harmonisation legislation should be preceded by a presidential executive order.
“This will enforce compliance with pro-SMEs initiatives and interventions of the government.”`
